Last year, 1,320 people bought one of my courses. And 54% of those sales came from existing customers. That’s massive. And this rate increased over time.
In business, you need to focus on the long-term. Getting new customers is important. But serving your existing customers well ensures that your business has a sustainable source of revenue.
It can cost five times more resources to attract a new customer, rather than retain an existing one. When you increase the retention rate by a mere 5%, your profit can go up from 25% to 95%. It’s simply more beneficial to retain existing customers than search for and pitch to new ones.
It’s not only about profit. Repeat customers are the #1 measure of value creation. It means your business is actually helping your customers. Otherwise, they would not remain a customer. That’s the most important thing I’ve learned about building a sustainable business
In this article, I’ll share tips with you to improve your retention rate so you don’t have to keep chasing new customers.
Plan multiple products and services
This is obvious, but people can only become repeat customers if you have multiple products/services to offer. So when you introduce a new product, always think of your existing customers as well. Is your new product something that fits within your existing lineup?
Let me give you an example. My first online course was about overcoming procrastination and improving productivity. The people who bought that course were professionals and entrepreneurs who were serious about improving their careers.
My second course was about improving your everyday writing skills, something the same people were interested in. If I would introduce a course about losing weight, it wouldn’t make sense for people who were interested in improving their careers.
But you don’t have to create all your products at once. If you’re a small business owner or a solopreneur, you only have so much time to create high-quality products/services. I started with one course. And then I added at least one course per year, over the last five years. By now, I’ve created six courses total. And I planned all of these courses in advance.
Of course, it’s impossible to know what you will launch in five years. But you need a sense of direction. So always keep the future in mind. What products can you potentially introduce in the next five years?
Serve your customer throughout their lifetime
You ideally want to take your customer on a journey. When they start buying your products, you want to offer them different products as they grow.
The best example is the car industry. Let’s say you’re a BMW fan. And your first car is a used BMW 1 Series. As you earn more, you might switch to a 3 Series. And later on to a 5 Series. Before you know it, you spend all your life driving a single brand. As your needs change, BMW is there to serve you the car that you need.
To create useful and effective multiple products/services for your customers, you can ask, “Where are my customers starting? And where do they want to go?” Then you provide a product/service that solves every stage.
To illustrate this customer journey more in-depth, let me share the feedback I’ve received from my customers. For example, let’s say a potential customer visits my blog; An aspiring entrepreneur whose main goal is to build a business that can support a family full-time, and eventually quit the day-job. There are different stages in her journey.
- First, she’s interested in adopting a different mindset. She reads a few of my articles and decides to buy one of my books.
- This content is helpful and she’s seeing a change in her life.
- At some point, she sets out a goal to build an online business and is interested in improving her productivity. So she signs up for Procrastinate Zero 2.
- She stays subscribed to my Inner Circle newsletter, which is only for my students and keeps in touch.
- After two years, she’s getting more serious about her side-business and wants to pursue it full-time.
- Around that time, I introduced digitalbusiness.school, which shows people how to build a sustainable digital business.
- She signs up for that program as well and is now on her way to reaching her goal of becoming a full-time entrepreneur.
This is an actual story of one of my students. And this journey took about three years. The key is to keep serving your customers and providing what they need—no matter at what stage they are. As they grow in life, you want to grow together.
Price your products honestly
Greed is a common pitfall in business. That’s why I’m not a fan of getting in business for the sole reason of making money.
Businesses thrive because they are useful. They give real value. So many people are willing to pay good money for products that change their lives, entertain them, save money, or have a practical purpose.
But there’s a limit to how much customers will pay in return for that value. Pricing your products honestly, based on the actual value it can provide your customers, is much more profitable in the long run. This also encourages people to keep buying more of your products.
Pricing is a very difficult thing. You don’t want to undercharge, and you don’t want to overcharge. I prefer starting a bit lower than your ideal pricing level, and then gradually increasing your prices over the years as you improve your products and courses.
For example, my first course was $49 because it was very short and didn’t have the same quality as now. As I added more content and features, I also raised the price to reflect the value. But there’s a limit. I won’t offer my productivity course for $1000 because that’s also not what I would pay myself.
Repeat customers are important: Keep serving them
Running a business takes a lot of time, money, attention, etc. While you’re busy attracting new customers and running the logistics of your business, you can’t neglect repeat customers. If you just sell and get out, you won’t be giving them much value afterward. Nobody wants to feel left in the air as soon as a seller receives their money.
Data shows that “poor customer service” is the 2nd top reason why shoppers stopped buying from a brand (“higher prices” being the 1st reason).
That’s why I always respond to reasonable emails, comments, or inquiries from my customers. I check-in with customers now and then, to make sure they’re using my products, and that they’re actually learning from them.
Always ask yourself, “How can I support existing customers in different stages of their Goal Journey?” Then test your business idea, create a Minimum Viable Product (MVP), launch it, and adjust it over time according to customer feedback.
Do these well, and you’re on your way to becoming a full-time, not-struggling entrepreneur.